UK adults 'financially illiterate'

A survey carried out by Abbey has found that government plans to introduce personal finance skills into maths GCSEs may not be such a bad idea after all.

The financial services provider found that 88 per cent of adults it surveyed did not know that they get six weeks to pay back an amount on a credit card before it accrues interest.

In addition, 38 per cent did not know what negative equity was and 26 per cent were unaware that failure to pay a secured loan could result in repossession.

Surprisingly, 18 per cent did not know what hire purchase meant, an increase of six per cent on last year.

Steve Shore, Abbey banking director, commented: "The credit crunch and cost of living has dominated the front pages for the past twelve months - and people say that they are more interested in understanding their finance than ever before."

Abbey also set a mock maths GCSE for a group of adults and found that one in seven would fail to achieve to required mark to gain a C.

It was recently found that the south-east of England is the worst place in Britain for debt issues, with the average person having run up over £26,000 in unsecured debts.